Market Overview

NextEra Energy (NEE) Misses on Q2 Earnings as Expenses Mount


NextEra Energy, Inc. (NYSE: NEE) announced second-quarter 2014 adjusted earnings of $1.43 per share, missing the Zacks Consensus Estimate of $1.45 by 1.4%. On a year-over-year basis, earnings decreased around 2.1% primarily due to higher total operating expenses and an increase in the shares count.

On a GAAP basis, NextEra Energy recorded earnings of $1.12 per share compared with $1.44 per share a year ago. The variance between adjusted and GAAP earnings, during the quarter, was due to a 33 cent impact from unrealized mark-to-market loss from non-qualifying hedges and a 2 cent gain associated with Spain Solar projects.


Total Revenue

In the second quarter, NextEra Energy's operating revenues was $4,029 million, in line with the Zacks Consensus Estimate. Quarterly revenues increased 5.1% from $3,833 million a year ago.

Segmental Results

Florida Power & Light Company (FPL): In the second quarter, the segment reported revenues of $2,889 million, up 7.2% from the year-ago figure. This was primarily driven by an increase in retail sales due to a combination of customer growth and higher average sales price.

NextEra Energy Resources (NEER): Segmental revenues were $1,036 million, down around 1% year over year. The downside was primarily due to restructuring and transaction costs as well as a non-cash income tax charge related to structuring Canadian assets, and a scheduled refueling outage at Seabrook Station Nuclear Power Plant.

Corporate and Other: The segment's quarterly revenues were $104 million compared with $91 million a year ago.

Operational Update

In the quarter under review, NextEra Energy's total operating expenses shot up 7.9% year over year to $3,078 million. This was primarily due to higher fuel, purchased power and interchange expenses as well as depreciation and amortization expenses.

Total operating income edged down around 3.1% to $951 million from $981 million a year ago.

The company's interest expenses in the second quarter were $305 million versus $266 million in the prior-year quarter.

Business Update

NextEra Energy has completed the initial public offering of NextEra Energy Partners, LP (NYSE: NEP).

Financial Update

NextEra Energy had cash and cash equivalents of $0.62 billion as of Jun 30, 2014, up from $0.44 billion as of Dec 31, 2013.

Long-term debts as of Jun 30, 2014 were $25.0 billion versus around $24.0 billion as of Dec 31, 2013.

NextEra Energy's cash flow from operating activities during the first half of 2014 was $2.45 billion compared with $2.25 billion in the year-ago period.


NextEra Energy revised its 2014 adjusted earnings projection to $5.15–$5.35 per share from the earlier range of $5.05–$5.45 per share.

For 2016, the company reiterated its earnings guidance in the range of $5.50–$6.00 per share.

NextEra Energy's earnings estimates are in line with its projected annual compounded growth rate of 5%–7% through 2016, taking 2012 as the base year.

At the Peers

American Electric Power Company Inc. (NYSE: AEP) reported second-quarter 2014 operating earnings of 80 cents per share, beating the Zacks Consensus Estimate of 75 cents by 6.7%.

CMS Energy Corporation (NYSE: CMS) reported second-quarter 2014 earnings per share of 30 cents, surpassing the Zacks Consensus Estimate of 26 cents by 15.4%.

Zacks Rank

NextEra Energy currently has a Zacks Rank #3 (Hold).

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Posted-In: Earnings News


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